India’s Jobs Crisis: Why Our Graduates Are Unemployable 

The state of higher education has deteriorated despite a boom in the education sector. Estimates of employable engineers have declined from 25 per cent in 2005 to 18.43 per cent in 2014.

This figure drops to low single digits when looking at relatively more demanding roles. Why is it that after having spent four years studying, a student lacks the basic skills to be employable?

The same question also applies to other areas. Why isn’t a student capable of being an economist after studying economics for 3/5 years?

While looking into the causes of the poor state of affairs in our tertiary education system, the outdated curriculum, resistance to change by faculty, and poor governance are often cited.

What is missed is that the interaction among these various components that compounds the problem. Thus, it is important to understand the incentive structures that shape and guide these interactions.

Firstly, The Problem Of Benevolent Equilibrium

Most students in the classroom aren’t really ‘academically oriented’. They want to get off with the least possible amount of work (Remember the times you asked for a free period?).

As rational beings, professors also on the other hand (for various reasons – differing areas of expertise, numerous subjects to be taught across various batches, administrative responsibilities, etc.) also have a similar incentive structure to expend the least amount of effort while trying to meet their targets.

Thus, there exists this downward pressure from both sides on the amount and quality of education.

As a result, what emerges from this is a ‘benevolent equilibrium’ where students look the other way when the classes lack substance and quality while the professors look the other way when students aren’t performing.

Any type of upward pressure is met with resistance.

What further compounds this downward pressure is that universities, like all organisations, are constrained by certain principles of work.

Whichever principle you take, 80:20 rule (where 20 per cent of the people do 80 per cent of the work) or Price’s Law (square root of the total number of people do 50 per cent of the work), there emerges a distribution of good and not-so-good professors.

A report on the state of professors at IITs puts the figure of ‘good’ professors at 30 per cent.

Two, The Chinese Whispers Problem

If the originator of a theory were to sit through a lecture on his/her theory, s/he would definitely find a completely new theory being propagated.

Despite living in the information age, knowledge imparted in classrooms is similar to a game of Chinese whispers.

This can be gauged by seeing the distance from the source material.

Let us consider the example of some hypothetical economic theory. It starts off with a seminal paper ABC, by professor XYZ.

This then appears in a textbook (predominantly a US textbook). An Indian author then comes out with his/her version in his/her textbook based on the US textbook. This is then read by the professor, in conjunction with blogs that have even shorter summaries of the work.

By the time ABC theory by professor XYZ reaches the class, it has become ‘XYZ-Foreign Author-Indian Author-Discussion Forum-Professor’ theory of ABC.

Textbooks by Indian authors have an algorithmic approach to every topic (introduction, assumptions, theory, advantages, limitations, and conclusion).

Condensing all material into this format comes at the cost of distortion (which vary among authors).

The Chinese whispers problem sows the seed to a vicious cycle preventing any improvement in quality and outcomes as the problems compound with time and progression across the course.

Three, The Problem Of ‘Theoretical’ Approach In Classrooms

One of the biggest contentions with the current education system is that whatever is taught in class is very ‘theoretical’. The word ‘theoretical’ has, borderline, become an abuse.

Whenever we wish to shun something aside as useless, we use the word ‘theoretical’ and when something is useful, it is termed ‘practical’.

This manifests in our day-to-day conversations. “Oh, so what were you taught in class? Was it all just theoretical?” So, what is with this ‘theoretical’ problem?

As a result of the ‘benevolent equilibrium’ and the ‘Chinese whispers’ problems, which cause a lack of breadth and depth, what is taught in class is very superficial.

This has come to be popularly known as ‘theoretical’. Theories are discussed in the algorithmic format, sidestepping the hows and whys of its development.

The math behind it is almost always shunned, further stripping it of substance and meaning.

To appreciate the importance of theory, it is necessary to understand what theory is. Theory, in essence, is an abstraction of reality within a particular framework to understand the workings of the world we inhabit.

They aren’t useless, aesthetic intellectual exercises that are devoid of any relevance.

From central bankers and policymakers to financial analysts and traders, many rely on theory in their day-to-day working lives.

In the introductory chapter of Arvind Subramanian’s Of Counsel, he describes how one of his papers was used by the Indian delegation during the TRIPs negotiations (More on the usefulness of theory).

Lastly, The Futility Of Degrees

While the above have been termed as ‘problems’, they are merely the first/superficial layer. When we peek into the second layer, the dominant thinking paradigm, we realise there is more.

One of the biggest challenges in our thinking about the education system is that we focus on the outcome rather than the process.

While considering their job prospects, students think of the degree as having met a criterion on the checklist of prerequisites for a job rather than the competence that is supposed to have been achieved.

As Dr Mona Khare points out in her paper titled Employment, Employability and Higher Education in India: The Missing Links “… students generally base their choice of subject to study on how it will contribute to their future employment opportunities rather than on what was intrinsically interesting”.

The benevolent equilibrium only adds fuel to this fire by churning out more and more youth into the workforce who are convinced of having met the criteria by having completed the course rather than gaining competence.